GEORGE J. HAZEL, United States District Judge.
In this slip-and-fall negligence action, Plaintiff Paula Stenlund seeks to recover damages for injuries she sustained while she was a guest at the Panama City Marriott Hotel in Panama City, Panama (the "Hotel"). After Defendant Marriott International, Inc. ("Marriott International" or "Defendant") answered the Complaint. ECF No. 8, this Court issued a scheduling order allowing for bifurcated discovery. ECF No. 12. Phase I of discovery was limited to issues regarding the relationship between Marriott International and non-party Hotel Properties of Panama, Inc. ("Hotel Properties"), the owner of the casino where Plaintiff alleges she was injured. See id. The Parties have completed Phase I and Marriott International now moves for summary judgment. ECF No. 26. The Motion is fully briefed and a hearing is unnecessary. See Loc. R. 105.6 (D. Md.). For the following reasons, Marriott International's Motion is granted.
For the purposes of this Motion only, the following facts are undisputed. See ECF No. 26-2 at 4-5; ECF No. 27-1 at 8-9.
That same evening, the manager of the Hotel took pictures of Plaintiff's injuries and indicated that she would "make a full report," but the Hotel staff also failed to provide any medical care or a referral to a local hospital that evening. Id. at ¶ 23. The following day, the Hotel sent a doctor "or one who was held out by [the Hotel] to be a doctor," to Plaintiffs room. Id. at ¶ 24. The doctor did not provide any substantive care, but only referred her to a local hospital to which the Hotel arranged transportation. Id. Plaintiff returned to the United States on February 15, 2011, and she continued to receive evaluation and treatment for the injuries she sustained as a result of the fall. Id. at ¶ 25.
Plaintiff initiated this action on May 9, 2014 alleging that Marriott International breached various duties that it owed to her and other guests, including a duty to ensure her safety, to avoid or remedy unsafe conditions in the Hotel and Royal Casino, to provide or arrange for prompt medical care, to adequately train and supervise employees to detect and remedy unsafe conditions and attend to injured guests, to provide adequate warnings of dangerous conditions and to refrain from marketing or promoting the Royal Casino once Marriott International became aware that dangerous conditions existed or likely existed at the Casino. See id. at ¶¶ 28-35. The Complaint alleges, in Count I, a direct liability theory of negligence, and, in Count II, vicarious liability for the negligence of employees of the Royal Casino. Id. at ¶¶ 28-41.
Marriott International is a publicly-traded Delaware company with its principal place of business in Maryland. ECF No. 27-1 at 1. It is a hospitality company and a worldwide operator, franchisor, and licensor of hotels and timeshare properties in several countries and territories under numerous brand names. Id. On August 25, 1995, Marriott International entered into an International Services Agreement (the "International Agreement") with Hotel Properties, which was to last for a term of twenty fiscal years. See ECF No. 44-1 at 3, 15. The International Agreement was one of many agreements specifying the scope of the relationship between Hotel Properties and Marriott International and its various subsidiaries and affiliates. See id. at 20. Pursuant to the series of agreements, Hotel Properties was to construct and equip a "first class, full-service international hotel" in Panama City, Panama, for which Hotel Properties was to be the owner. Marriott International Services, Limited ("Marriott Services"), a Bermuda company and foreign subsidiary or Marriott International, was to manage and operate the Hotel. See ECF No. 40-1 at 6; ECF No. 44-1 at 3; ECF No. 27-1 at 2.
Pursuant to the International Agreement, Marriott International was required to "provide or cause its Affiliates to provide the International Advertising, Marketing, Promotion, and Sales Program" for the Hotel. ECF No. 44.1 at 9. Marriott International was also required to provide certain "routine corporate and regional services" including "executive supervision and support from Marriott International headquarters" and "general expertise and general operational assistance in areas such as executive supervision, employee relations, strategic planning and policy-making, research and development, energy management, retail shop operation, insurance, life safety, meal planning, food preparation and service, accounting controls, and internal auditing...." Id. It also provided "core training programs for the benefit or management-level Hotel
On the same day that Hotel Properties and Marriott International entered the International Agreement, Hotel Properties and Marriott Services entered into a wholly separate, more detailed agreement — to which Marriott International was not a party — governing the management or the Hotel by Marriott Services (the "Management Agreement"). See ECF No. 40-1 at 6. Marriott International's obligations under the International Agreement were, however, conditioned upon, among other things, Hotel Properties performing all of its obligations under the Management Agreement between Hotel Properties and Marriott Services, as well as the other related agreements, including a License and Royalty Agreement, Fee Agreement, and Technical Services Agreement.
Under the Management Agreement, Hotel Properties appointed Marriott Services as Hotel Properties' "exclusive agent to supervise, direct, and control the management and operation of the Hotel" for a term of twenty fiscal years. ECF No. 40-1 at 23, 29; see also id. at 92 ("The relationship of [Hotel Properties] and [Marriott Services] shall be that of principal and agent...."). During the term of the agreement, the Hotel was to be "known as a Marriott hotel" and Hotel Properties was granted the right to use Marriott Trademarks. Id. at 55. Management of the Hotel was under the "exclusive supervision and control" of Marriott Services, granting Marriott Services the discretion and control "in all matters relating to management and operation of the Hotel" including with respect to employment policies and promotion and publicity of the Hotel. Id. at 23. The agreement specified that "[e]xcept for certain key Hotel Employees who at [Marriott Services'] election may be employees of [Marriott Services] ... all Hotel employees shall at all times be the employees of [Hotel Properties]" but that Marriott Services maintained the "absolute discretion regarding all Hotel Employees to hire, promote, supervise, direct, train, fix compensation, dismiss and generally establish and maintain all employment policies and practices...." Id. at 66. Additionally, Marriott Services was responsible for "maintain[ing] the Hotel in good repair and condition and in conformity with applicable laws and regulations" which included the responsibility to "make or" cause to be made such routine maintenance, repairs and minor alterations" as may be required to fulfill that obligation. Id. at 43.
In December 2004, the Management Agreement between Marriott Services and Hotel Properties was amended upon the proposal by Hotel Properties to open the Royal Casino adjacent to the Hotel (the "Amendment"). See ECF No. 41-1. Hotel Properties was the owner of the Royal Casino, which, according to the Amendment,
Although the Casino was subject to annual quality assurance reviews "covering such areas as guest experience, service delivery, integrity of games, maintenance and cleanliness." id., Marriott Services was not to perform "any services at the Casino relating to the gaming operations or security and surveillance, nor [would] [Marriott Services] receive any revenue tied to the profitability of the gaming operations at the Casino." Id. at 4. To further distinguish the Hotel from the Casino operations, the Casino was to have a name independent of the Hotel name, Casino employees were required to wear different uniforms from those worn by Hotel employees which could not use or display the name "Marriott" or bear any Marriott trademarks, and the Casino operator was not permitted to use any Marriott trademarks or trade name except for any advertising material used "solely for the purpose of indicating the location of the Casino at the Hotel and provided that the word `Marriott' [was] in a font and style different than the Trademark." Id. at 5. Marriott Services was permitted, however, to list the Royal Casino "as an amenity of the Hotel in the worldwide directory or in connection with any other advertising" and Hotel Properties and Marriott Services agreed in the Amendment to "participate in joint marketing programs designed to benefit both the Hotel and Casino," subject to the trademark restrictions previously mentioned. Id. at 6.
Finally, in 2007, Hotel Properties wished to expand the Hotel by approximately 76 guest rooms to be constructed adjacent to and above the Casino. Hotel Properties and Marriott Services again amended the Management Agreement to redefine the scope of obligations under that agreement to include Marriott Services" management of the newly constructed rooms.
Marriott International was not a party to either the 2004 or 2007 Amendments to the Management Agreement. See ECF No. 41-1 at 8. 15. But it did have some minimal oversight over the operations of the Royal Casino through its Casino Oversight Committee (the "Oversight Committee" or "Committee"). The Oversight Committee's role in the overall Marriott enterprise was to "assure that [Marriott's] Gaming Activities [including table games, slot devices, parimutuel wagering, lottery terminals, etc.] are conducted in accordance with its commitment to ethical conduct, fair dealing, legal compliance and Marriott guidelines and standards." ECF No. 43-1 at 3, 5. The Committee had varying levels of oversight for gaming activities, however, depending on the level of involvement that Marriott entities had with the gaming operation at one of its hotels. Id. at 5. A Category I casino was one where a Marriott entity managed both the hotel and casino, which "presents the most sensitive relationship between Marriott and its Gaming Activity." Id. A Category II casino was one "where the hotel owner or franchisee operates the casino, or ... where the hotel, while not managing the casino, receives income from Gaming Activities that varies based on the casino revenues." Id. A Category II casino required that the Oversight Committee exercise "substantial due diligence ... because Marriott has a contractual relationship with the casino operator and/or receives a percentage of the revenue from the Gaming Activities at the property." Id. at 6. Category III and IV casinos were those where the relationship between Marriott entities and the casino were more attenuated, requiring correspondingly less oversight by the Committee. Id. The Parties agree that the Royal Casino, where Plaintiffs injury occurred in this case, is a Category II casino under the Oversight Committee's standards. See ECF No. 26-2 at 3; ECF No. 27.1 at 6-7. Under this category, the Committee was responsible for approving the casino operator's suitability prior to that person's operation of the casino, and for conducting "annual quality assurance reviews, covering such areas as guest experience, service delivery, integrity of games, maintenance and cleanliness and other quality measures that are generally applicable to casinos located at Marriott hotels." ECF No. 43-1 at 11.
In opposition to Defendant's Motion for Summary Judgment, Plaintiff submitted an affidavit indicating that she and her husband chose to stay in the Hotel because they are members of Marriott International's Reward Program, and, when they looked online "at various Marriott website portals," they saw promotions for the Marriott Hotel in Panama City, Panama, which they understood included an "in-house, on site Casino." See ECF No. 27-12. Additionally, as exhibits to her memorandum in opposition to Defendant's Motion for Summary Judgment, Plaintiff submitted certain website pages that were "representative of the website pages that [she and her husband] saw and relied upon in making [their] decision to go to the Marriott Hotel" in Panama and the attached Royal Casino. See id. In the description of the Hotel, those websites advertise that guests could "[s]hare a cocktail or a delightful meal with friends at any of our 3 restaurants or tempt Lady Luck at our on-site casino." ECF No. 27-8 at 2; see also ECF No. 27-9 at 3 ("The Marriott Panama Casino
"Under Rule 56(c), summary judgment is proper `if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (citing Fed. R. Civ. P. 56(c)). The party moving for summary judgment bears the burden of demonstrating that no genuine dispute exists as to material facts. Pulliam Inv. Co. v. Cameo Props., 810 F.2d 1282, 1286 (4th Cir.1987). If the moving party demonstrates that there is no evidence to support the non-moving party's case, the burden shifts to the non-moving party to identify specific facts showing that there is a genuine issue for trial. When ruling on a motion for summary judgment, "[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Importantly, at the summary judgment stage, it is not the Court's function to weigh the evidence but simply to decide if there is a genuine issue for trial. Id. at 249, 106 S.Ct. 2505. A "genuine" dispute of material fact is one where the conflicting evidence creates "fair doubt," Cox v. Cnty. of Prince William, 249 F.3d 295, 299 (4th Cir.2001), such that "a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505.
Before turning to the merits, the Court must first determine what law will apply in this case. Although Plaintiffs alleged injuries occurred in a foreign country, she argues that Maryland law should apply. See ECF No. 27 at 1. "In a diversity case, a district court applies the conflict-of-law rules of the state where it sits." DiFederico v. Marriott Int'l, Inc., 714 F.3d 796, 807 (4th Cir.2013) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941)). Which substantive law must apply in a given case will depend on the nature of the action. Although Plaintiffs Complaint contains two counts — one alleging direct liability and one alleging vicarious liability — both are premised upon a single legal theory, i.e., the alleged negligence of Marriott International.
In its Motion, Marriott International argues that Plaintiff's claims cannot proceed because she "sued the wrong party in the wrong venue." ECF No. 26 at 11. According to Marriott International, the Casino owner, Hotel Properties, is responsible for maintenance and repair of the physical premises of the Casino, and, although Marriott International's foreign subsidiary, Marriott Services, manages the Hotel, it is, pursuant to the Management Agreement, only responsible for management of the Hotel itself; Marriott Services, according to Defendant, did not have any duties to manage or maintain the Royal Casino, which was the location of Plaintiff's accident. See id. at 12. And, in any event, Marriott International argues that it cannot be liable for any alleged negligence on the part of its foreign subsidiary merely because it is the corporate parent. Id. at 37. Plaintiff disagrees, and contends that, through the series of agreements, Marriott International "tightly control[led] virtually every aspect of the [H]otel and [C]asino where Plaintiff was injured" through the establishment of management platforms and its audit and inspection requirements. See ECF No. 27 at 4. This level of control, she contends, supports the conclusion that an actual agency relationship existed between Marriott International and its subsidiary, Marriott Services, as well as Hotel Properties, the owner of the Hotel and Casino. Alternatively, she argues that she can prevail under a theory of "apparent authority" or "apparent agency," which is to say that, even if Marriott International did not actually control the condition that caused her injury, it could still be liable for creating the impression that Hotel and Casino guests were actually "dealing with" Marriott International. See id. at 16. The Court will address each of Plaintiffs arguments in turn.
With respect to Plaintiff's first argument that Marriott International may be liable on the basis of an actual agency relationship between itself and Marriott Services and/or Hotel Properties, the relevant question is the degree of control that Marriott International exercised over the operations of the Hotel and Casino.
Here, Marriott International's "control" over the operations of the Hotel was limited to: (1) providing "routine corporate and regional services" including "executive supervision and support" and "general expertise and general operational assistance" with respect to areas such as executive supervision, employee relations, research and development, insurance, life safety, accounting controls, and internal auditing; and (2) providing "core training programs" for management-level Hotel employees and other unspecified training programs for other Hotel employees. ECF No. 44-1 at 9-10. Pursuant to the International Agreement, Marriott International also required that the Hotel use Marriott International's Reservations System, Property Management System, and other Marriott Chain hotel systems "which systems are intended to benefit the Marriott Chain...." Id. at 12. As for the control over the Casino, the only role Marriott International had in supervising the Casino operations was that the Oversight Committee had the power to conduct "annual quality assurance reviews" for issues such as "guest experience, service delivery, integrity of games, maintenance and cleanliness and other quality measures...."
Plaintiff suggests, however, that Marriott International may nevertheless be liable because, pursuant to the Management Agreement, Marriott Services had the obligation to "supervise, direct, and control the management and operation of the Hotel." See ECF No. 27 at 6; see also ECF No. 27 at 14 (arguing that Defendant's obligations to business invitees were not relieved "simply because they may have been passed on to a wholly owned Affiliate"). But the mere fact that Marriott Services, which has not been made a party to this action, is a subsidiary of Marriott International is not alone enough to find any liability on the part of Marriott International. "[A]lthough the courts will, in a proper case, disregard the corporate entity and deal with substance rather than form, as though a corporation did not exist, shareholders generally are not held individually liable for ... obligations of a corporation except where it is necessary to prevent fraud or enforce a paramount equity." Serio v. Baystate Properties, LLC, 209 Md.App. 545, 60 A.3d 475, 484 (Md.Ct. Spec.App.2013) (citation omitted). The same is true when the shareholder of a
Moreover, the result is the same if this Court applies the law of Panama with respect to this issue. Under the Civil Code of Panama, "commercial associations" are "juridical persons" to which "the law grants its own personality independent from that of each one of its members." Julio Romanach, Jr., Civil Code of Panama 2009 Translated into English with an Introduction and Index 31 (2009). In support of its Motion for Summary Judgment, Marriott International submitted the expert report of Jorge Federico Lee, a former Alternate Justice of the Supreme Court of Panama, who explained that, under the Commercial Code of Panama, a commercial corporation has a `juridical personality' which is "distinct from that of its partners...." ECF No. 26-1 at 6; see also DiFederico, 130 F.Supp.3d 986, 990-01, 2015 WL 5516843, at *5 (D.Md. Sept. 18, 2015) (relying on expert affidavit regarding the law of Pakistan and granting summary judgment in favor of defendant). Mr. Lee thus explained that Plaintiffs claim against Marriott International caused by an act or omission attributable to Hotel Properties or Marriott International's subsidiary, Marriott Services, would fail under Panamanian law. Id. at 8, Additionally, claims for vicarious liability under Panamanian law are limited to claims involving only certain relationships, such as that a father and mother may be liable for damage caused by their minor or incapacitated children, and that owners or directors of an establishment may be liable for damage caused by their employees. Id. at 9; see also Julio Romanach, Jr., supra, at 226. Marriott International was not, however, the owner of the Hotel or Casino and therefore cannot be held vicariously liable under Panamanian law for any alleged negligence of their employees. And, although Panama law recognizes that liability may flow on the basis of an agency relationship, Mr. Lee explained that an agency relationship is generally only formed through a "Commission Contract," and that no such contract exists in this case. ECF No. 26-1 at 11-12. The Court, through its own research, was unable to find anything that conflicted with Mr. Lee's statement as to the principles of Panamanian law that could apply in this case.
Plaintiff alternatively argues that, even if there was no actual agency relationship between Marriott International and Hotel Properties, she may recover against Marriott International on a theory of "apparent agency."
Bradford, 93 A.3d at 707 (citations omitted); see also Reserve Ins. Co. v. Duckett,
Although Plaintiff submitted evidence that the Royal Casino was promoted and marketed as being Marriott's "on-site" Casino, see ECF No. 27-8 at 2; ECF No. 27-9 at 3, any subjective expectation that Plaintiff had regarding whether the Casino was owned or controlled by Marriott International was not objectively reasonable in light of the totality of the other facts in the record. Importantly, Casino employees were required to wear different uniforms than Hotel employees; those uniforms could not bear the name "Marriott"; the exterior entrance to the Casino was "identifiable as a distinct entrance from the Hotel both in location and markings"; and the Casino operator was not permitted to use any Marriott trademarks or trade name except for any advertising material used "solely for the purpose of indicating the location of the Casino at the Hotel and provided that the word `Marriott' [was] in a font and style different than the Trademark." ECF No. 41-1 at 2-3, 5. The only objectively reasonable conclusion to be drawn from these facts is that the Hotel marketing of the Casino as being "on-site" of the Hotel was "for the purpose of indicating the location of the Casino at the Hotel." id. at 5, rather than to create the appearance of an agency relationship between Marriott International and the owner of the Casino, Hotel Properties.
It is a closer question, however, as to whether it was objectively reasonable for Plaintiff to assume that the Hotel was owned, operated, and controlled by Marriott International, as opposed to being managed by a foreign subsidiary of the Defendant. And because Plaintiff alleges that the Hotel staff also breached a duty owed to her after she fell in the Casino, namely, a duty to "provide and/or arrange for prompt and appropriate medical care for her injuries." ECF No. 1 at ¶ 31, if an apparent agency relationship existed between Marriott International and Marriott Services, the entity managing the day-to-day operations of the Hotel, see ECF No. 40-1, then Marriott International might be liable for that alleged negligence. In support of this point, Plaintiff relies primarily on Crinkley v. Holiday Inns. Inc., 844 F.2d 156 (4th Cir.1988), a case in which the United States Court of Appeals for the Fourth Circuit, applying North Carolina law, concluded that a hotel franchisor could be held liable in negligence on an apparent agency theory where the franchisee used the franchisor's trade name and trademarks, the franchisor "engage[d] in national advertising that promote[d] its national system, without distinguishing between company owned and franchised properties," and the franchisor "publishe[d] a directory listing the properties within its system, also without distinguishing between company owned and franchised properties." Id. at 166-67. On appeal from a jury verdict in favor of the plaintiff, the Court concluded that a jury could reasonably conclude that the franchisee was "was operated in such a way as to create the appearance that it was owed by" the franchisor. Id. at 167. Defendant, however, points to cases from other jurisdictions where courts have concluded that centralized reservation services and uniform product branding does not create an objectively reasonable expectation that a parent company is the apparent principal of a particular chain outlet location. See, e.g., Carris v. Marriott Int'l, Inc., 466 F.3d 558, 562 (7th Cir.2006) ("Almost everyone knows that chain outlets, whether restaurants, motels, hotels, resorts, or gas stations, are very often franchised rather than owned by the owner of the trademark
Maryland courts, it seems, have adopted the latter view. Although not presented with the precise factual circumstances at issue in this case, in Chevron, U.S.A., Inc. v. Lesch, the Maryland Court of Appeals considered whether a national oil company, Chevron, U.S.A., could be liable in negligence as the apparent principal of an employee of a car repair shop located at a gas station called "Walker's Chevron, Inc." In concluding that the plaintiffs negligence claim under an apparent agency theory failed, the Court explained:
570 A.2d at 846 (quoting B. P. Oil Corp. v. Mabe, 279 Md. 632, 370 A.2d 554, 559 (1977)); see also id. ("[One may a]s well argue, that because the word `Chevrolet' or `Buick' is displayed in front of a place of business, General Motors would be estopped to claim that it was not the owner of the business. It is a matter of common knowledge that these trademark signs are displayed throughout the country by independent dealers." (quoting Reynolds v. Shelly Oil Co., 227 Iowa 163, 287 N.W. 823, 827 (1939))). It follows, then, that, under Maryland law, the fact that the Hotel used Marriott's trade name and trademarks and that reservations for the hotel were made through a central reservation system would not satisfy the objective element required to demonstrate the existence of an apparent agency.
In any event, even if Maryland law would not compel the result that the Court reaches today, Plaintiffs claim for apparent agency must fail under Panama law. Mr. Lee, Marriott International's expert in Panamanian law, explained that the doctrine of "apparent authority" or "apparent agency" does not exist in Panama's legal system. ECF No. 26-1 at 15. Once again, because Plaintiff failed to respond to this argument, she conceded the issue. See Kissi, 664 F.Supp.2d at 123. Thus, Plaintiff's argument that she can prevail on her negligence claims on the basis that Marriott International was the apparent principal of the Hotel or Casino employees must fail, and summary judgment is proper.
For the foregoing reasons, Marriott International's Motion for Summary Judgment, ECF No. 26, is